NASA Chief James M. Beggs, General Dynamics Corp. and three of its executives pleaded not guilty Monday to charges of plotting to hide cost overruns on a prototype of the Sgt. York anti-aircraft gun.
"I plead not guilty to each count," Beggs, a former executive with General Dynamics, told U.S. District Judge Ferdinand F. Fernandez in Los Angeles.
Also entering not guilty pleas were General Dynamics executives James Hansen Jr., Ralph Hawes and David McPherson.
A trial date was set for April 8.
The indictment alleges that the defendants conspired to hide $7.5 million in company losses on the $41-million prototype weapon by charging expenses to other government-funded accounts between 1978 and 1981, resulting in a $3.2-million loss to the government.
Attorney Thomas P. Sullivan, acting as chief counsel for General Dynamics, told Fernandez that the defendants wanted the trial to begin as early as April 1, citing a government suspension of virtually all contracts with the company until the case is resolved.
"This company could be literally . . . put out of business by this suspension," Sullivan argued. "We are in a real serious bind because of this letter," he said, referring to a Navy Department notification that the company's government contracts were suspended.
Justice Department attorney Randy I. Bellows argued that the case was too complex to be heard so quickly, and contended that government attorneys had 2.7 million documents to review.
12-Week Trial Seen
Attorneys estimated that the trial could take at least 12 weeks to complete. Bellows said that he would call at least 70 witnesses.
Earlier, U.S. Magistrate Volney Brown Jr., citing conflicts of interest, disqualified himself from the case. Brown said that he and his wife own several shares of General Dynamics Corp. stock.
U.S. Magistrate Venetta S. Tassopulos presided in his place at an initial court appearance for the four defendants. She approved $5,000 bail for each defendant.
If convicted, the four face up to five years in prison and a $10,000 fine on each count. The corporation faces up to $10,000 in fines on each count.
The seven-count indictment returned Dec. 2 renewed a public furor over defense spending and caused Beggs to take a leave of absence from his job as administrator of the National Aeronautics and Space Administration until the matter is resolved.
Barred From Contracts
The indictment also caused the Pentagon to bar General Dynamics indefinitely from obtaining any new government contracts, although the Navy later relented and permitted the company to bid on nuclear-submarine work.
General Dynamics spokesman Peter Connolly has said that the company committed no crime, adding that the indictments resulted from "a highly sophisticated regulatory and accounting matter which should be resolved in a civil forum."
Beggs, 59, of Bethesda, Md., was the company's executive vice president and a corporate director during the period covered by the indictment. He became head of NASA in July, 1981.
The Division Air Defense (DIVAD) weapon that came to be known as the Sgt. York was a radar-guided, tank-mounted gun designed to protect tanks and infantry against aircraft.
Eventually, the Pentagon awarded the production contract to a General Dynamics competitor, Ford Aerospace & Communications Corp. of Orange County.
The Sgt. York was scrapped last August.
by Defense Secretary Caspar W. Weinberger, who said: "The system didn't work well enough. That's the simple fact."